Gold up at midday but loses most of strong early gains
(Kitco News) Gold and silver prices are firmer in midday U.S. trading Monday, on safe-haven demand as the Russia-Ukraine geopolitical situation is deteriorating. However, gold is well down from the solid overnight price gains. The metals markets will continue reacting to the latest news headlines on the Russia-Ukraine war. April gold futures were last up $9.10 at $1,896.70 and May Comex silver was last up $0.358 at $24.375 an ounce.
Marketplace anxiety is high to start the trading week, following the weekend news that Russian President Putin put is military on high nuclear alert after the U.S. and Europe slapped severe sanctions on Russia for its invasion of Ukraine, including the West’s removal of various Russian banks from the important SWIFT financial system. This could further disrupt the flow of commodity trade worldwide. Both SocGen SA and Credit Suisse AG have stopped financing commodities trading from Russia. Russian and Ukrainian officials are meeting today for talks aimed at ending the four-day-old war. Ukrainian President Zelensky said he did not believe much would come out of the meeting.
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Global stocks markets were lower overnight and the U.S. stock indexes are lower at midday but well up from overnight lows. A Barrons headline Monday read, “Tougher sanctions spark Russian market mayhem; it’s threatening to spread.”
The Bank of Russia said it will start buying gold on the domestic precious metals market. Russia announced an end to its two-year gold-buying hiatus, as the Russian ruble sank to a record low versus the U.S. dollar. Russia’s central bank had to raise its main interest rate to 20% from 9.5%. Russia is the fifth-largest sovereign gold owner and gold accounts for 20% of world reserves.
The marketplace wonders what Putin will do next. It appears Ukraine’s military is putting up stiffer resistance than Putin thought. And the strong economic sanctions from the West are quickly crippling the Russian economy. Russian cyberattacks on the West seem likely soon. With Putin having seemingly painted himself into a corner, the world is also now thinking about the unthinkable: a nuclear exchange between the Russia and the U.S.
The key outside markets today see Nymex crude oil prices posting sharp gains and trading around $96.00 a barrel. The U.S. dollar index is higher. The benchmark U.S. 10-year Treasury note is presently yielding 1.87%. U.S. Treasuries are also seeing safe-haven buying interest.
Technically, April gold futures prices have backed well off the overnight highs. Bulls have the solid overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the February high of $1,976.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at $1,900.00 and then at $1,918.30. First support is seen at last week’s low of $1,878.60 and then at $1,856.70. Wyckoff's Market Rating: 8.0
May silver futures bulls have the overall near-term technical advantage. Prices are in an uptrend on the daily chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $25.705 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at today’s high of $24.88 and then at $25.00. Next support is seen at $24.00 and then at last week’s low of $23.755. Wyckoff's Market Rating: 6.5.
May N.Y. copper closed down 260 points at 445.90 cents today. Prices closed near the session low today. The copper bulls have the overall near-term technical advantage. Prices are in a choppy, two-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the February high of 469.95 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 428.80 cents. First resistance is seen at today’s high of 453.20 cents and then at last week’s high of 459.35. First support is seen at 442.50 cents and then at 440.00 cents. Wyckoff's Market Rating: 6.0.